Top level power rejig at Dr Reddy's
This article was originally published in Scrip
Dr Reddy's Laboratories (DRL) has effected a significant board level re-organization, carving out "separate" roles of the chairman, managing director and CEO in the company as part of efforts to implement best-in-class governance practices.
Satish Reddy, the firm's vice-chairman, managing director and chief operating officer (COO) and son of DRL's late founder Dr Anji Reddy, has now been appointed chairman of the board, while GV Prasad will continue as the CEO. Mr Prasad, who is Dr Anji Reddy's son-in-law, also takes on the role of co-chairman and managing director.
Mr Satish Reddy said that the reorganization in the roles should provide further focus to distinct activities while simultaneously providing "space" for internal growth to the company's talented senior management team. Dr Reddy's president, global generics, Abhijit Mukherjee, has now been appointed as COO.
"My involvement in the company will be different but not less," Mr Satish Reddy clarified in response to an analyst's query in the post results call 13 May on whether his new role implied lowering of the founder group's commitment in the company.
A company statement also quoted Mr Prasad as saying that Mr Satish Reddy was actively involved in various industry associations and leads the firm's corporate social responsibility efforts. “In his new role, he can contribute significantly to shaping the direction and course of action on these fronts, in addition to being a custodian of the corporate brand and driving governance processes and agenda of the board,” Mr Prasad added.
Some analysts tracking the development, though, suggested that reorganization could potentially have larger meaning. Nimish Mehta, founder of Research Delta Advisors, said that the rejig at the top management level can perhaps be viewed as a "semblance of a power shift in Dr Reddy's towards the CEO", though how things pan out going forward remained to be seen.
Mr Mehta views Mr Prasad as a "strategist" and believes that core operational issues across the company's businesses will increasingly be part of his direct remit.
Whether or not more is at play, the late founder Dr Anji Reddy had, way back in 2002, in an interview with Scrip proudly underscored how you can't get a better team than his son and son-in-law to lead Dr Reddy's. "DRL is in very safe hands," the soft-spoken Dr Anji Reddy had then said.